Nigeria’s state oil firm NNPC has extended its crude-for-product swap contracts, the country’s main avenue to meet the bulk of its fuel needs, until June 2019.
Nigeria’s petrol consumption is roughly 40 million litres per day in the nation of almost 200 million people. The west African country became increasingly reliant on NNPC for fuel imports via swaps after a currency devaluation and recession in the last few years, which priced independent importers out of the spot market.
NNPC’s swap contracts currently account for about 70 percent of the country’s imports while 30 percent is done through the spot market. The swap contracts, known as Direct Sale Direct Purchase, came into effect in July last year and were due to end after one year. They were already extended once earlier this year to December. NNPC paired up foreign trading firms with local partners to do the swaps.